By
Steve Muchoki
April 19th, 2024
On October 1, the flagship crypto-asset staged another significant move to reclaim the $45k level.
This Bitcoin move coincided with when the United States currency, US dollar, slid from its all-time high, indicating that the weakening dollar value could benefit the price of the king of crypto.
The US dollar Index which measures the strength of the currency against six foreign currencies, for the first time in September, rose to 94.50; however, the news of the increased unemployment rates in the country plunged the dollar.
From the labour data released yesterday, the number of Americans who are jobless have increased by 11,000 within a week to 362,000.
This could mean that the Federal Reserve would have to postpone its proposed $120 billion asset purchasing program to a later month and keep the interest rate lower while the dollar attempts to recover.
This recent development, no doubt is not good for a falling currency. However, crypto enthusiasts and investors could see this as an ideal reason on why they should continue investing in the space.
While speaking to newsmen, the president of Matrix Exchange, Vasja Zupan, noted that the dollar’s weakness and devaluation against rising inflation would boost investors’ interest to invest heavily in crypto markets. According to him, “Bitcoin in its core proposition has an integrated hedge against inflation and, therefore, persistently higher inflation in the US can only push it upwards. Therefore, in the long term, the dollar’s worth will continue to be lesser than Bitcoin”.
From a technical outlook, there are indications that the BTC value could still leverage on this to go higher though fears of a correction remain in place.
TradingShot, a popular independent market analyst stated that “the US Dollar Index has been trading within a Bullish Megaphone pattern since late June and is now approaching its Higher Highs trend-line with the 1 year Resistance waiting at 94.750. This is a familiar pattern as the very same sequence has been formed back in June – September 2018.”
He continued that “as you see both patterns formed on a 1D Golden Cross (when the 1D MA50 crosses above the 1D MA200). Based on the 1D RSI , it appears that DXY is right at the top of the formation as on August 15 2018, building up a strong pull-back to the bottom of the Megaphone.”
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